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While cruising over the ocean in his antique biplane, the Tornado, Sonic notices a small island particularly lush with greenery. He flies down for a bit of vacation time, closely followed by an unseen figure that lands on the opposite end of the island... The tiny resort turns out to be West Side Island, which, as the folklore goes, was once the home of a flourishing civilization. The people of the island utilized the power of seven mysterious stones for the advancement of their society. However, their prosperity lead to avarice, which did not sit well with the gods. The displeased deities reclaimed the stones and sealed them away.

After a few days on the island, it occurs to Sonic that he's being followed. His pursuer is a young fox with two tails who, upon being discovered, dashes into the shade of a nearby tree. Sonic ignores him and zooms off, but the fox whirls his two tails like a propeller and follows the blue stranger at full speed. Sonic is impressed both with the fox's tenacity and his ability to keep up, so he decides to let him tag along. He learns that his new companion is named Miles Prower, though the animals of the island call him "Tails" after his unique mutation.

Early one afternoon, Tails discovers the Tornado sitting on a beach. Being fascinated by all things mechanical, the young fox eagerly runs up to the machine for a thorough investigation, but shyly pulls back when he spots Sonic snoozing in the shade of a wing. His awkward moment is interrupted by a huge explosion from the island's interior. Sonic snaps up to see the forest ablaze and robots scouring the area. It doesn't take the blue hero three guesses to figure out who's behind the disruption: Dr. Robotnik, who had discreetly followed Sonic onto West Side Island, is now tearing the place apart in search of the seven Chaos Emeralds. He needs fuel for his Death Egg, a planet-sized space station with unthinkable power. Sonic and Tails take off to locate the Emeralds before Robotnik and squash his evil ambition once more.

The gameplay of Sonic the Hedgehog 2 builds upon the basic set-up of the original Sonic the Hedgehog game. The player finishes each level, generally moving from left to right, within a time limit of 10 minutes (Sonic dies one second after the timer reaches 9:59, though it does not actually click up to 10:00).[6] Along the way, rings are collected and Badniks are defeated. Star posts serve as checkpoints, where if the player were to lose a life then he or she would return to one.[3] When the player has collected at least 50 rings, star posts can be run past for an optional Special Stage.[3] At the end of act 2 of each zone, Sonic confronts Dr. Robotnik, although there is an exception in the Metropolis level in which there are 3 acts. In addition, both Sky Chase Zone and Wing Fortress Zone have one act, and Sky Chase Zone does not have a boss.[3]

The game contains a total of 11 zones. These include: Emerald Hill Zone, Chemical Plant Zone, Aquatic Ruin Zone, Casino Night Zone, Hill Top Zone, Mystic Cave Zone, Oil Ocean Zone, Metropolis Zone, Sky Chase Zone, Wing Fortress Zone and Death Egg Zone. Although zones have grown significantly in size since Sonic the Hedgehog, they now consist of two acts instead of three (with the exception of the Metropolis Zone, which has three acts, and the final three zones, which each have one), and there is greater emphasis on variety between levels. The gameplay has also become even faster; to that end, Sonic is able to perform a new special move referred to as the Super Spin Dash Attack.[3] The Super Spin Dash attack allows Sonic to spin in place, as if revving up an engine, before taking off at high speeds from a stationary start. Sonic's running motion also features longer strides.

From the options menu, players can select to either play as Sonic alone, Tails alone or Sonic and Tails.[3] By default, players control Sonic while Tails tags along unhindered. However, a second player may control Tails separately. He can collect rings and attack badniks, but can't break open item boxes. Should Tails move off-screen, he will eventually return. Every time Tails dies (except when playing as Tails alone), he returns to Sonic by flying down to the ground.

Obtaining all seven Chaos Emeralds by clearing all of the special stages will unlock a new feature; Sonic's ability to change into Super Sonic. Sonic changes into his Super Form when he has collected at least 50 rings and jumps into the air. At this point, he glows yellow and is virtually invincible, although he can still get killed by drowning, getting crushed, falling off the screen, running off the screen, or running out of time. His speed, acceleration, and jump height are all increased as well. This means that it is much more difficult to control Sonic in this form, especially when the player needs to make precise jumps. However, his Spin Dash Attack is decreased in effectiveness as the initial velocity is decreased rapidly. Super Sonic consumes one ring per second and when he has no rings left or he reaches the end of the act, he reverts to his normal state. This severely cripples the player if the former happens as they are left with no rings; if the latter happens the player's level bonus is reduced due to not having as many rings as they could have had.

In two player versus mode, players compete against each other or together to fight Dr. Robotnik - either as Sonic or Tails - in a split-screen race through three regular zones and one special stage.[3] Regular zones include Emerald Hill, Casino Night and Mystic Cave and have different music from their one player counterparts, while the Special Stage is similar to the Emerald Stage in single player. In the regular levels, players are ranked in five areas (score, time, rings held at the end of the level, total rings collected, and number of item boxes broken), with the player scoring highest in the most levels winning the round, while in the Special Stage, players compete to obtain the most rings.[3] Once one player finishes one of the regular levels, the other player must finish the zone within 60 seconds or lose a life.[3]

In case of a tie, an additional Special Stage round must be completed. Also, to heighten the stakes, there are two unique items in versus-mode: a teleport item that instantly switches positions between players in a zone, and a Robotnik item that damages the unlucky player. Furthermore, an optional setting allows that all item boxes in two-player mode are only teleports.

In Sonic the Hedgehog 2, there are 7 special stages. When Sonic has collected at least 50 rings and he hits a Star Post, a red halo of stars will briefly float above it, which Sonic can then jump through to get to a special stage.

Special Stages track Sonic from behind while he runs through a three-dimensional half-pipe course filled with rings and bombs. A set amount of rings must be collected to pass through three checkpoints and eventually obtain the emerald itself. When nearing a checkpoint a reminder will appear to inform the player how many more rings are required to pass the point. Should Sonic run into a bomb he will lose several rings and will be immobilized for a brief moment. The order of stages is fixed in rising difficulty, and Sonic cannot enter the next stage without passing the previous (unlike Sonic 1). Whether the player is able to obtain the emerald or not, Sonic is transported back to the last star post he hit in the zone when the special stage is over and has zero rings.[3] However, any rings obtained prior to entering the Special Stage will be replaced on the level as if they were never collected.

Taking into account the strengths and weaknesses of the predecessors, the designers of Sonic the Hedgehog 2 intended for the graphics to display the "natural beauty" and "mechanical texture of materials forming a clear contrast with each other." The staff introduced new graphic elements such as the special stages with 3D-like appearances. The crews responded to a comment regarding the predecessor by increasing the speed of Sonic the Hedgehog 2 in relation to its predecessor.[8]

A prototype of the game, dating from before Sonic 2 itself, was discovered on a Chinese GeoCities site and has been widely distributed on the Internet. Only four levels can be played in "normal" gameplay; the rest have to be accessed through the level select code. There are three scrapped stages found in the prototype. When other versions were discovered, this version was named the "Simon Wai Prototype", in honor of the person who found the Chinese site.

Many are not entirely playable, but can be explored using the debug code. These levels include Wood Zone, Dust Hill Zone, Genocide City Zone, and Hidden Palace Zone. The prototype is frequently examined by hackers to determine how Sonic the Hedgehog 2 was developed. It was recently stated in an interview with Yuji Naka that this prototype was from a demonstration cartridge that was stolen at a toy show in New York in 1992.[9]Akinori Nishiyama has also stated that the leak was due to the lack of security at the time.[10]

In Asia and Brazil, the prototype version was put on cartridges and passed off as the final version by pirates who have altered it slightly to stop the Sega logo from showing when the game boots up, as was common practice.

In 2006, a member of Sonic Retro community nicknamed drx released an earlier prototype of Sonic the Hedgehog 2 on his website. Many speculate that this is the prototype that was shown on an episode of the TV show Nick Arcade. Despite initial suggestions that it should be called the "Nick Arcade Prototype", it is formally known as the "Drx Prototype", to continue the naming pattern started with Simon Wai.

On February 23, 2008, 464 Mega Drive prototypes were leaked. Five of these prototypes were later builds of Sonic 2. These prototypes were near-finished and by this time, had been divested of the lost stages (Hidden Palace, Wood Zone, Genocide City, etc.)

Hidden Palace Zone, which had Act 1 nearly finished, but not Act 2. Both the Simon Wai and drx prototypes contain identical versions of this zone. A re-imagining of Hidden Palace Zone was later included in Sonic & Knuckles. Unlike the other scrapped levels, a working remnant of this zone (sans graphics, but retaining a playable structure) can be found within the data of the final "Sonic 2." The music for this zone was also left in the final game, and can be listened to on the sound test (it is track 10).

Wood Zone had Act 1 partially completed (with a small, playable area at the start), but Act 2 remained completely empty.

Genocide City Zone (also known as Cyber City Zone), an intended one-act zone, never underwent level construction. As such, entering the zone results in Sonic falling to death. However, concept art has been discovered; and it was later revealed that the planned level design was adapted into the level that would take its place - Metropolis Zone Act 3.

Dust Hill Zone, a desert zone, isn't found in any prototype; and only one mock-up screen shot exists. Contrary to popular belief, the name was not reused as a working title for Mystic Cave Zone; Mystic Cave merely appeared in its level select slot in the Simon Wai prototype.

Rock Zone has had no screen shots released, and is not found in any prototype. It was going to be a past version of Dust Hill Zone, back when Sonic the Hedgehog 2 was planned to contain time travel, a concept later used in Sonic CD.

Winter Zone also saw no released screen shots, and is not found in any prototype. This zone would have been a continuation of Dust Hill Zone, featuring appropriately recolored variations of its graphics. Later Sonic titles such as Sonic 3 and Sonic Adventure would include zones based in snowy conditions.

From the Sonic 2 options screen, the player can access a sound test that allows them to listen to any music or sound effects from the game. Among these is a music track, Track 10, that is not used in-game. It was generally assumedTemplate:Fact that this piece of music was for a level deleted from the final game, an assumption that is supported by using Game Genie to access the remnants of the incomplete Hidden Palace Zone.

Sega launched a $10 million dollar advertising campaign for the Sonic 2's release.[11] The game was the first game to be shipped worldwide on on the same release day on the Sega Mega Drive on November 211992. The Sega Genesis release in the United States and the European Mega Drive release came three days later on November 241992, a Tuesday, and the release day was dubbed "Sonic 2s day". 400,000 copies of Sonic 2 in the first seven days after release.[11] It has since been re-released as part of the following compilations:

Knuckles the Echidna in Sonic the Hedgehog 2 is a game activated by attaching Sonic the Hedgehog 2 to the passthrough cartridge of Sonic & Knuckles that was released later by Sega. The resulting game is almost identical to Sonic the Hedgehog 2, except that one plays as Knuckles the Echidna. As Knuckles has abilities and weaknesses that Sonic and Tails do not, the game is an overall different experience. Knuckles can glide and climb walls, which allows him to gain access to areas otherwise hidden or unreachable by Sonic and Tails, while his weaker jumping abilities make some situations, such as certain boss fights, more difficult. The two-player mode and options screen have also been removed. Players who are most familiar with the level layouts in Sonic 2 will notice a few minor differences. Unlike in the default game, when a player activates a star-post and enters the special stage, the ring count remains upon returning to the regular stage. Also, Knuckles will retain the number of rings he had when he passes through a checkpoint, after a life is lost, while Sonic and Tails start each checkpoint with zero rings whenever they lose a life.

Due to the popularity of its predecessor Sonic the Hedgehog, Sonic 2 already had an established fanbase anticipating its release.[14] The release of Sonic 2 was the main reason that Sega caught up to Nintendo in the "console wars". It brought their market share up to 50% within six months of its release.[15] As of June 2006, it has sold six million copies altogether.[16] It was well received by most gaming reviewers. It was praised for its large levels,[15] colourful graphics and backgrounds,[15][17] increased cast of characters and enemies alike,[14] and music. GameSpot stated that "Time may have eroded Sega's prominence, but it hasn't done much to diminish how sweet Sonic the Hedgehog 2 is." and, along with other reviewers, commented on how it is still a fun game to play.[14][15]Electronic Gaming Monthly awarded it as the best Sega Genesis game of 1992.[18]

The game's main criticisms were of the two player racing mode that was a new introduction to the series. Sonic 2 achieved the split-screen display through a 448-line display-mode, one of the few Genesis games to use it. This mode doubled the workload on the CPU, and caused interlacing-induced visual artifacts. Reviewers criticized the game's noticeable slowdown and prominent flickering, not to mention the squashed play area for each player. Finally, the game only allowed two-player mode in three different zones.[17] William Burrill of the Toronto Star described the two player racing mode as the "only part of the game that can be faulted," citing that the mode and its split screen view "squeezes the graphics, plumps up the characters and slows down the action."[19]